Iran to Award Bangestan Development Work Soon

Iran will soon sign a deal for development of southwestern Bangestan oil field with a foreign company. Director of the Oil Engineering Department at the Oil Development and Engineering Company Ali-Akbar Vahidi Al-e Aqa told IRNA that his department had finished verifying the technical aspects of the bids, offered by foreign companies, and financial packages have also been opened.

Al-e Aqa said his department has been in talks with National Iranian Oil Engineering and Development Company, and three foreign companies namely Shell, BP and Total SA on the tender project since 1998. He cited complexity of the project as the reason for delay in announcement of the winner of the project. He said no bidder has so far been able to win the offer.

Consecutive changes in the form and contents of buy-back contracts aiming to raise Iran's share in the deals, punish violator of the principle for optimal use of facilities, long-term rather than short-term commitments on the part of foreign bidders and inclusion of extra conditions for continued production have been hindering signing of the deal, he added.

The official said Bangestan oil field is expected to yield up to 260,000 barrels of oil a day. Chairman of Shell in Iran, Robert Weener, had recently criticized the slow pace of talks between Iran's Oil Development and Engineering Company and the bidders on development of Bangestan oil field, saying his company is very interested in participating in the project.

Talks on development of the field have reportedly been underway at National Iranian Oil Company since 1998 with no tangible results. Weener said the delay in announcing the eventual winner of the tender for development of Bangestan oil field is due to change of conditions for development of the field by Oil Development and Engineering Company. He said three tenders were to be held for three phases of the development project but as a result of changes in policy just one tender would be announced for the entire phases.

He added that Shell is not in talks for development of Azadegan oil field, because it is to serve as consultant partner to Japanese companies which are holding talks with National Iranian Oil Company on the issue.

The official said the Japanese companies had joined Shell in projects for development of Soroush and Norouz oil fields by gaining 20 percent of shares of the project.